the rating agency Standard & amp; Poor’s (S & amp; P) withdrew Tuesday to oil giant ExxonMobil its triple-a rating, a first since the 30′s, citing the plunge of over 60% in oil prices which affects profitability
the rating agency Standard & amp;. Poor’s (S & amp; P) withdrew Tuesday to oil giant ExxonMobil its triple-a rating, a first since the 30′s, citing the diving more than 60% of oil prices affecting its profitability
Microsoft IT groups and pharmaceutical Johnson & amp;. Johnson are now the only two major US companies still have the triple A from S & amp; P told AFP a spokesman.
ExxonMobil is now rated “AA +”, the second best score in the evaluation scale of the first global rating agency.
This note is accompanied by a “stable” outlook, suggesting that it will not be affected in the short term.
This is a blow for ExxonMobil, which has always served this “triple a” as a marketing argument in trade negotiations and to become a privileged partner of major oil exporters.
in addition to the symbolic aspect, this lowering of rating should increase costs ExxonMobil loan.
“Nothing has changed in terms of prudent financial management philosophy of our balance sheet,” responded Scott Silvestri, a spokesman. ExxonMobil “remains focused on long term value creation for shareholders despite the short market volatility,” adds Mr. Silvestri in an email.
On Wall Street, the ExxonMobil title continued evolve in the green in mid-session, gaining 0.56% to 87.82 dollars around 4:05 p.m. GMT
– Big dividends –
S & amp;. P explains its historic decision by the ExxonMobil is confronted with a low oil price environment but must simultaneously reinvest significantly in any project by paying big dividends to its shareholders.
This equation is, according to rating agency, difficult as oil prices are expected to remain low for some time.
“despite low service costs and an improvement in productivity, we believe that maintaining its level of production and replace reserves will eventually require large investments, “says S & amp;. P
in addition,” the company will choose to dip into its cash to pay its shareholders rather than raise money (pending a better tomorrow) or to reduce its debt. “
ExxonMobil must publish its first quarter results on 29 April. In 2015, the profits of the Texas group were halved to 16.15 billion dollars. He even recorded in the fourth quarter its smallest profit since 2002, to $ 2.78 billion, the fifth consecutive quarterly decline in profits.
To withstand this challenging environment, ExxonMobil, considered the oil company with the most solid financial shoulders, plans this year to reduce by 25% the envelope for development drilling, platforms, terminals and oil and gas fields, after a decline of 20% in 2015
S & amp;. P had warned in February that it was considering lowering the rating mainly because of the increase of the group’s debt
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